WORLD TRADE  
ORGANIZATION  G/C/W/586 
2 November 2007 
 
 (07-4769) 
Council for Trade in Goods Original:   English 
  
 
TRANSITIONAL REVIEW MECHANISM PURSUANT TO PARAGRAPH 18  
OF THE PROTOCOL ON THE ACCESSION OF THE  
PEOPLE'S REPUBLIC OF CHINA ("CHINA")  
 
Questions and Comments from Japan to  the People's Republic of China
 
 
  The following communication, dated 1 November 2007, is being circulated at the request of the delegation of Japan.  
_______________ 
 
 
 Japan welcomes China’s efforts to carry ou t the commitments under the Protocol of its 
Accession to the WTO. 
 Japan submits its questions and comments in a dvance so that the Chinese authorities are able 
to reply and submit necessary information at  the next Council for Trade in Goods session. 
 
1. Export prohibition on natural sand  
 Japan remains concerned about China’s e xport prohibition on natural sand. China has 
explained that the prohibition is aimed at prot ecting the environment a nd preserving its natural 
resources.   
 In light of such an objective, Japan woul d like to ask China if it has introduced any 
restrictions on domestic production or  consumption of natural sand as well.  If yes, please provide the 
details. Also, Japan would like to know the rationa le why China needs the strict export prohibition 
while a restriction on domestic production or  consumption may achieve its objective.  If no, it would 
be difficult for China to justify this measure under WTO rules.  
 Furthermore, if there are any plans to ame nd the export prohibition measure, Japan would like 
to know the details.
 
 
2. Export restriction on fluorite 
 Japan is also concerned about China’s export restrictions on fluorite. 
  As of September 2007, the Export License (E/L ) quota of fluorite of 2007 was limited to 
342,500 ton, which was less than half that of 2006.  Japan would like  China to explain the reason why 
China has been reducing E/L quota of fluorite exte nsively while the production volume of fluorite in 
China has been increasing. 
 
 At the Transitional Review Mechanism (TRM) of the Council of Trade in Goods held in 
2006, China explained that “Export restrictions are mainly aimed at protecting the environment and G/C/W/586 
Page 2  
 
  preserving natural resources, especially exhaustible natural resources.  China believes that measures 
in this regard are consistent with Article XX of GATT.  In order to achieve this goal, China both 
implements domestic production contro ls and export restriction measures.”  However,  it is unclear 
whether effective domestic production controls have been implemente d, since China had not provided 
concrete data about them at the past TRM meetings .  Please provide concrete data and information of 
the restriction on domestic produc tion or consumption of fluorite. 
 
3. Export restrictions on coke  
 Japan understands that China implements E/L c ontrol on exports of cokes. Since insufficient 
licenses were issued three years ago, the export pric e of Chinese cokes soared and has left the market 
disrupted. Japan is greatly concerned about the issuan ce plan of E/L. Since it is not clear whether this 
measure is implemented in conjunction with rest rictions on domestic produc tion/consumption or not, 
Japan is concerned about its consistency w ith GATT Article XI and GATT Article XX (g). 
  China explained that the measures were to restrict domestic produc tion and consumption of 
cokes. However, it is unclear whether those me asures have effectively reduced the production and 
consumption of cokes and coal which is an ingred ient of cokes. Japan requests China to show the 
quantitative effect of those measures for reducing the domestic production and consumption of cokes 
and coal.  Also, Japan would like to request the clarif ication of the legal basis of respective restriction, 
and of their consistency with GATT.  
 If there are any plans to reform the E/L me asure, Japan would like to know the details. 
 
4. Export restrictions on non ferrous metals 
 Japan understands that China implements an E/L system on various kinds of non-ferrous 
metals: rare-earths, tungsten, antimony, tin, s ilver, magnesium, bauxite, indium and molybdenum. 
Indium and molybdenum of these non-ferrous metals b ecame subject to quantitative trade restrictions 
in June 2007, and the number of E/L on most of  the other non-ferrous metals has been declined. 
  Japan would like to request China to cl arify the policy objective of the quantitative 
restrictions by way of its E/L system on various kinds of non-ferrous metals: rare-earths, tungsten, 
antimony, tin, silver, magnesium, bauxite, indium a nd molybdenum. Also, Japan would like to request 
the clarification of the legal basis of the respectiv e restriction, and of their consistency with GATT. 
  China has explained that a resource protection,  an environmental conservation, and a trade 
surplus reduction are the reasons for its quantita tive trade restrictions. In terms of a resource 
protection, Japan would like to request clarificati on whether there is a restriction in China for the 
domestic production or consumption of these metals , with some additional specific data on their 
domestic production, consumption and restriction. In  terms of an environmental conservation and a 
trade surplus reduction, Japan would like to request clarification for the consistency of the quantitative 
trade restriction with GATT.  
 If China has already made reports on its con cerned quantitative trade restriction measures to 
any other WTO committees, Japan would like to kno w to which WTO committee the Government of 
China has reported its measures.   Also, Japan would like to request clarification of the amount of E/L issued and its actual 
export volume of indium and molybdenum of 2 007 which became subject to quantitative trade 
restrictions in June 2007.   G/C/W/586 
 Page 3 
 
 
  5. Government procurement 
 At the Working Party for the WTO accession, China made clear its commitment to initiate 
negotiations for its membership in the Governme nt Procurement Agreement (GPA) by tabling an 
Appendix 1 offer as soon as possible (see Report of the Working Party, para.341). 
   China answered at the TRM held in last Novemb er that “(a)t present, a working team of 21 
Government Ministries or Agencies, including the Mi nistry of Finance and Ministry of Commerce, 
had been established to work on the initial offe r for the accession negotiation”.  However, until now, 
the initial offer has not been offered yet. Japan is interested to know China’s view on the schedule of 
the coming negotiations for its accession to th e GPA including the preparation process for the 
negotiations. 
 
__________